With the price of oil at its lowest levels in more than six years, oil rig drilling company Transocean said Tuesday it wants to cancel two quarterly dividend payments and also said it could take $2 billion in new impairment charges.
The company needs approval from shareholders to stop the third- and fourth-quarter dividend payments, and it is calling a special shareholder meeting so its investors can vote on the proposal. The meeting is scheduled for Oct. 12.
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Transocean stock has plunged 67 percent over the last year as the price of oil and gas tumbled and companies cut back on drilling activity. The stock is at its lowest price in decades, and it fell another $1.35, or 11.1 percent, to $10.85 in after-hours trading.
The Switzerland-based company has already taken about $1.67 billion in impairment charges in 2015. Transocean said Tuesday that it is evaluating the value of its investments based on continued weakness in oil prices and in the offshore drilling market, and it expects to take about 2 billion Swiss francs ($2.1 billion) in impairment costs.
Transocean also said it wants to reduce the face value of its stock to reduce the losses on its balance sheet and add money to its capital reserves. Shareholders will vote on that move at the October meeting.
Transocean declared a second-quarter dividend of 15 cents on Aug. 14. That payment will return about $55 million to shareholders.